Not all companies suffered when the pandemic broke out last year.
The unusual thing about the current crisis is that it affected different industries to varying degrees.
Sectors like aviation and tourism were badly hit as lockdowns and border closures curtailed passenger travel.
However, on the flip side, companies offering financial services, digital payments and e-commerce saw their fortunes soaring as more people went online.
Now, with multiple COVID-19 vaccines being distributed around the world, the question arises as to whether such companies can continue to do well.
Investors may have been impressed by sharp growth last year, but a more important factor to consider is the sustainability of that growth.
Here are three companies that did well in 2020 and are poised to continue enjoying strong growth this year.
Shopify (NYSE: SHOP)
Shopify is a Canadian e-commerce company that provides tools for entrepreneurs to start, market and manage a retail business of any size.
As of 31 December 2020, Shopify’s platform provided opportunities for 1.7 million businesses in more than 175 countries.
The company reported an impressive set of earnings for its fiscal year 2020.
Revenue for the year soared 86% year on year to US$2.9 billion, with both Subscriptions Solutions and Merchant Solutions division revenue seeing year on year growth of 41% and 116%, respectively.
Gross merchandise value (GMV), a measure of the volume of transactions passing through Shopify’s platform, nearly doubled year on year to US$119.6 billion.
Gross payment volume of US$53.9 billion accounted for 45% of all GMV processed, up from 42% in 2019.
Shopify reported a net profit of US$319.5 million, reversing a loss of US$124.8 million the previous year.
Shares of the e-commerce company had more than doubled from US$408 to US$1,131.95 in 2020, and are up another 7.8% year to date.
Management has outlined key initiatives for 2021 to enable it to onboard more entrepreneurs and serve more merchants on its platform.
These include continued investment in its fulfilment network, development of the Shop app to foster buyer loyalty and retention, and localising its platform to suit non-English-speaking geographies.
Match Group (NASDAQ: MTCH)
Match Group is a provider of dating products and has a portfolio of popular apps such as Tinder, Match and OkCupid.
The business has witnessed healthy growth in the past year as pandemic-induced lockdowns pushed more people to use smartphone apps to communicate.
Match’s share price soared 80% in 2020, going from US$84.03 to US$151.19.
The company reported that revenue for last year grew 17% year on year to US$2.4 billion while operating income rose 16% year on year to US$746 million.
Net profit from continuing operations climbed 12% year on year to US$554 million.
The company’s subscriber base continued to expand, going from 9.8 million to 10.9 million in 2020.
The average revenue per user (ARPU) also inched up 5% year on year from US$0.59 to US$0.62.
Match estimates that 2021 revenue will be in the range of US$2.75 billion to US$2.85 billion, representing around a mid-teens year on year growth.
This growth will be driven by a combination of an increase in both subscriber and ARPU.
Chipotle Mexican Grill (NYSE: CMG)
Chipotle Mexican Grill, or CMG, is a restaurant chain serving Mexican-inspired food such as tacos, burritos and quesadillas.
As of 31 December 2020, the company had over 2,750 restaurants located in the US, Canada, UK, France and Germany.
For 2020, CMG’s total revenue increased by 7.1% year on year to US$6 billion.
Despite facing widespread store closures early last year due to the coronavirus outbreak, CMG managed to pivot to digital sales to pick up the slack.
Digital sales grew 174% year on year in 2020 and accounted for 46% of total revenue.
In contrast, digital sales made up close to a fifth of total revenue back in 2019.
The company opened 161 new restaurants last year, of which 61 were opened in the fourth quarter.
Importantly, 42 of these 61 new stores included a “Chipotlane”, a drive-thru area where customers can quickly and conveniently pick up their orders.
Net income inched up 1.6% year on year to US$355.8 million, an impressive feat considering the store closures.
CMG is now testing a new car side pickup format at 29 of its restaurants in California.
Customers can now order using the Chipotle app, drive up to the restaurant of their choice, and then tap “I’m here”.
A staff member from CMG will then bring the order to the customer’s car.
Since the pandemic began, CMG has been deploying innovative solutions such as a digital kitchen, chipotlanes and group ordering to deal with the crisis.
CMG’s share price surged by 65.7% last year to close at US$1,386.71. Year to date, shares are up 1.6%.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
